Cheap Apps Stifling Innovation?

Cheap Apps Stifling Innovation?

Although Apple has seen 10,000 applications and 300 million downloads in less than four months in its App Store, some are complaining that the lower priced apps are stifling innovation and inhibiting developers.

Craig Hockenberry, a seasoned developer who created the Frenzic and Twitterrific apps describes this problem well in his open letter to Steve Jobs.

The main problem is the enormous amount of 99-cent apps or less (see graph), what Hockenberry calls “ringtone apps,” where developers reduce their prices as low as possible so they’ll get favorable placement in iTunes. Hockenberry describes this, “We have a lot of great ideas for iPhone applications. Unfortunately, we’re not working on the cooler (and more complex) ideas. Instead, we’re working on 99¢ titles that have a limited lifespan and broad appeal. Market conditions make ringtone apps most appealing.”

Hockenberry explains that iPhone users complain about the cost of some apps without understanding what that app is really worth and that they should be willing to pay more for higher quality apps. Furthermore, Hockeberry says that Apple’s policies facilitate this.

Hockenberry says;

“Our products are a joy to use: as you well know, customers are willing to pay a premium for a quality products. This quality comes at a cost—which we’re willing to incur. The issue is then getting people to see that our $2.99 product really is worth three times the price of a 99¢ piece of crapware.”

Hockenberry does not propose a solution to this problem but rather just writes to Jobs, ”You and your team are perfectly capable of dealing with it on your own terms.” However, he further warns that this price point problem could prevent development of an app that could do for the iPhone what the spreadsheet did for the Apple II or similarly what desktop publishing did for the Mac.

What do you all think? Are you willing to pay more for better apps? Or are the 99-cent apps worth their price?